The US Department of Justice, led by President Donald Trump, has relinquished its investigation into Federal Reserve Chair Jerome Powell, potentially paving the way for Trump's nominee, Kevin Warsh, to take the reins. Warsh, who boasts significant wealth, including cryptocurrency assets, has been awaiting a Senate vote following his confirmation hearing. Trump, who has consistently criticized Powell for maintaining high interest rates, selected Warsh as his replacement.
However, Republican Senator Thom Tillis had vowed to block Warsh's confirmation as long as the DOJ's investigation into Powell continued. The investigation, which centered on cost overruns in a Federal Reserve building project, was dropped on Friday, with US Attorney for the District of Columbia Jeanine Pirro announcing that the Fed's inspector general would oversee the matter. This development has increased the likelihood of Warsh's confirmation, with betting odds surging from 30% to over 80%.
The move is seen as a strategic maneuver by Trump to exert greater influence over US monetary policy and install allies on the Federal Reserve board, which would have significant implications for the crypto industry and stablecoin issuers. Senator Elizabeth Warren dismissed the move, characterizing it as an attempt to install Warsh as Fed chair, while Senator Tillis expressed support for Warsh, calling him a 'great nominee.'